Even if a deal is stitched up between France and Germany over EFSF leverage, haircuts imposed on holders of Greek sovereign debt and banks recapitalised, the fundamental problem will remain: the divergence of the economies of eurozone countries. Fiscal and political union is not a panacea. The old East Germany is still in bad shape economically after re-unification and huge sums spent in an attempt to catch up with the rest of Germany.
The following articles consider these issues:
http://www.spiegel.de/international/europe/0,1518,792641,00.html
http://www.telegraph.co.uk/finance/financialcrisis/8837327/Frances-Nicolas-Sarkozy-and-Germanys-Angela-Merkel-hold-crisis-talks.html (very gloomy)
http://www.telegraph.co.uk/finance/financialcrisis/8836548/Britain-cant-save-Europe-but-wemight-still-save-ourselves.html (very, very gloomy)
No comments:
Post a Comment